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  • FDI in Retail: Red Carpet for Foreign Brands

    Published on May 17, 2018

    By S K Unnithan

    New Delhi: Prime Minster Naendra Modi is known for smart and swift decisions. May it hurt his supporters, Modi is unyielding. Traders and vendors are his ardent admirers, but that did not deter Prime Minister Modi from allowing foreign giants in Indian retail markets. Modi also has no qualms to reverse his earlier postures on issues like FDI. A few years back Narendra Modi in his avatar as chief minister of Gujarat, vociferously opposed Foreign Direct Investment (FDI) in Indian retail trade. With his latest move PM Modi has upturned CM Modi

    Accusing the then Congress-led UPA Government at the centre for “selling out the nation to foreigners” Gujarat Chief Minister Narendra Modi on December 5, 2012 at 5:03 pm tweeted “Congress is giving nation to foreigners. Most parties opposed FDI but due to sword of CBI, some didn’t vote & Cong won through back door!”

    Six years after, as Prime Minister of the country Modi has opened up the retail sector in full to the same foreigners, with little hesitation.

    Opposing the Manmohan Singh’s decision on FDI in retail sector, the Gujarat Chief Minister had on 13

    September, 2012 lamented that allowing foreign players in retail market would mean immense harm to small shopkeepers. FDI in retail would hit hard the domestic manufacturing sector and create joblessness.

    People are perplexed that after becoming the Prime Minister Modi has taken a U-turn on crucial issues like GST and FDI. On 10 January, 2018, his Cabinet approved 100 percent Foreign Direct Investment (FDI) in single-brand retail, that too through the automatic route. Earlier, government approval was mandatory for FDI above 49 percent in retail sector.

    Modi is facing flak even from his hard-core supporters for the “controversial” decision on FDI in retail sector. Confederation of All India Traders (CAIT) has in a statement has termed the Modi Government decision as “brutal” and anti-people. The decision to allow 100 percent FDI retail trade would facilitate free entry of Multi National giants from across the globe to domestic retail trade, the traders body alarmed. “This decision of the government violates the poll promise of the BJP”, CAIT accused.

    Criticizing the Cabinet decision V K Banal, General Secretary, Federation of All India Vapar Mandal, Said ” the government’s decision will render millions across the country jobless.

    According to Mr. Bansal while the governments and organized sectors are able to provide employment for less than six crore people the unorganized sector, prominently the retail trade, provides jobs for over 44 crore people, mostly in rural India. Bansal warned the government with sever repercussions, “if the government changes its decision (on FDI). We many even call for a nationwide agitation to oppose this brutal move of the government.”


    Mr. K N Marzook, Kerala Chamber of Commerce and Industry (KCCI), believes Modi Government’s decision to allow 100 % FDI in retail trade will take the country back to East India Company days. “We had to fight over 300 years to free the nation from the slavery of foreign corporate rule. Seventy years after independence our current rulers are rolling out red carpet to the same multinationals from overseas. Are we willfully opting for economic slavery again?”

    The Government decision would help more than 200 fashion and apparel brands from abroad who are lined up to enter India, like Avva, Colin’s, Damat, Tudba Deri and Dufy, said Marzook, a leading textile dealer.


    RSS, the ideological mentor of Prime Minister Narendra Modi has a firm and declared stand against FDI. A few years ago on October 31, 2013, while peaking to an elite group in Delhi RSS Sarsanghachalak Mohan Bhagwat said “we believe that Foreign Direct Investment (FDI) in retail is against the economic interest of the country and it should not be allowed at all.”


    Opposing Modi Government move to open the flood gate for FDI in retail trade a senior leader of Sangh Parivar fumes “like in the British days, foreign investment is likely to infuse and promote alien culture. FDI free flow will lead the nation to economic slavery.”


    Swadeshi Jagran Manch (SJM), the economic arm of RSS is also up in arms against Modi’s decision on FDI. The Manch feels 100% FDI retail trade could jeopardize interest of the country. SJM is highly critical of the government decision to forgo the condition of mandatory sourcing requirement of 30% of purchases from India. “With this decision foreign companies would get freedom of procuring the products from anywhere in the globe. This would go against the interests of the domestic manufacturing and also would discourage the future investment in manufacturing in India and therefore would go against the own declared policy of the government of encouraging ‘Make in India.”

    The general perception also is not much in favour of Modi’s “red carpet” reception to foreign MNCs. AAM AADMI (not AAP) feels “Prime Minister Narendra Modi has successfully enhanced his international stature through smart posturing. But, at Home Modi is putting his popularity at stake through uncanny decisions like 100% FDI in retail.”